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First-time Buyer

Help to Buy scheme has supported 130,000 home sales

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New figures have been released showing the success of the Government scheme to help aspiring homeowners onto the ladder.

Over 130,000 homes have been bought using the Government’s Help to Buy: Equity loan and Mortgage Guarantee schemes since they were launched in 2013.

The Help to Buy: Equity loan – which allows qualifying borrowers to apply for a 20% equity loan from the Government to buy a new build home – saw 62,569 completions totalling almost £2.7bn in the past two and a half years.

However, the level of completions dropped by 33% between the second and third quarters of this year, falling from 9,122 to 6,105 completions.

The value of the equity loans also decreased significantly over the same period, from £419m to £286m.

The average purchase price was £218,000 – far below the UK average of £286,000.

Andy Frankish, new homes director at Mortgage Advice Bureau (MAB), said: “The Help to Buy equity loan scheme helped more than 6,000 people onto the property ladder in the last three months: an annual increase of 4%.

“The vast majority of those benefitting from the scheme are first-time buyers who understandably are purchasing properties in the lower price brackets. The scheme continues to reach its target audience of buyers joining the property market for the first time as homeowners.”

The Help to Buy: Mortgage Guarantee – which allows lenders to purchase a guarantee on a borrower’s mortgage – saw a reverse trend.

While the quarter-on-quarter increase in completions was modest – rising from 9,562 to 9,589, the value of the Mortgage Guarantee used increased, from £201m in the second quarter to £215m in the third.

The scheme supports 65,920 mortgages at a total value of £9.7bn, with 79% of applicants purchasing their first home. The average property value was £155,573.

Both schemes saw most purchases from applicants with an annual household income of £30,000 to £40,000.

The Help to Buy: Equity loan will run until 26 November 2021 and the Mortgage Guarantee until 31 December 2016. In Scotland and Wales, the end date for both schemes is set at 31 March 2016.